Weekly News Clippings (January 16, 2014)

Political jitters to slow economic growth (The Daily Star, January 16, 2014)
The World Bank forecasts Bangladesh's GDP growth to be around 5.7 percent this fiscal year, well below the government's target of 7.2 percent, due to political unrest, image crisis of the garment sector and slow remittance growth. The projection came in the multilateral lender's latest edition of the Global Economic Prospectus, which was released on January 14 this year. The report predicts South Asia's regional GDP growth to come to 5.7 percent this year and developing countries' 5.3 percent. Since October the country has lost around 50 working days due to shutdowns and blockades, which directly affected the small and medium industries and transport sectors.


Many garment makers yet to apply new wage (The Daily Star, January 15, 2014)
Many garment owners are yet to adopt the new pay scale more than a month after the implementation date. For instance, a worker at a garment factory, continues to receive a monthly salary of Tk. 9,000, though he is entitled to get Tk. 10,900 under the new wage structure. The management of that factory has also "altered" the type of factory into textile, so as to avoid paying higher wages. The new wage structure, which offered a 77 percent pay rise, is not applicable to the textile sector.


Solar power brings bliss in remote villages (Dhaka Tribune, January 14, 2014)
The Rangpur Dinajpur Rural Service (RDRS) Bangladesh, with the support of BRAC, the Grameen Shakti, Rahim Afrooz and Srijnoni, has set up 1,300 solar power units in char areas and other remote villages inhabited by the ethnic minority communities on the Basin of Brahmaputra River. Each solar-power unit costs between Tk12,000 to Tk45,000 depending on its power generation capacities The use of solar power has made a great difference to the lives of thousands of people living deep within the region.

Bangladesh seeks to import 3,000 T of soybean oil (Reuters, January 13, 2014)
Trading Corporation of Bangladesh is seeking to import 3,000 tonnes of refined soybean oil in a tender to secure supplies for the Muslim fasting month of Ramadan. The tender will close on Feb. 10 and the refined oil will be shipped within 45 days of the opening of letters of credit on the purchases. The state buyer has also moved to import essential items and build reserves before Ramadan starts late June, when higher demand for those items traditionally pushes up prices.

Bangladesh Food Producer Starts Bike Export to EU (Bike Europe, January 13, 2014)
The largest food producer in Bangladesh, PRAN-RFL Group is investing 10 million US dollar in a bicycle assembly plant which is primarily focused on export to the European Union markets. The EU trade rules allow Bangladesh (and Cambodia) to export bicycles, parts & accessories to the EU's 28 member states without the regular 14% import duty on complete bicycles and 4.7% duty on imported parts and accessories. In 2012 Bangladesh exported 472,000 bikes to the EU making it Europe's 5th biggest bike supplying country.

Political standoff takes toll on foreign aid (Dhaka Tribune, January 12, 2014)
Bangladesh development partners have cut their aid due to slow disbursement during the long spell of political turmoil in the country. No significant foreign aid commitments were made over the last couple of months with major donors such as WB, ADB, Japan, UK’S Department for International Development (Dfid) and USAID. Ending in November, the foreign aid commitment stood at US$1.5bn, .a sharp drop compared to the $1.9bn during the same period last year, according to the Economic Relations Division. The lower growth of aid flow to the country would not only affect the development work, it would also impede economic growth. The foreign aid target in the current fiscal year is $520m more than the $2.78bn received.

Explaining the Recent Decline in Remittances in Bangladesh (blogs.worldbank.org, January 12, 2014)
For the first time in recent memory, Bangladesh has experienced a decline in remittances in the first half of the fiscal year. Migrant workers sent $6.77 billion home in July-December, down from 8.41% compared to that of last year. The factors that can potentially account for the decline in remittances include:
•    The stock of Bangladeshi migrants abroad,
•    Earnings per migrant worker,
•    Their average propensity to save, and
•    Their average propensity to remit money home out of those savings.
Detailed data to quantify the contribution of each of the factors noted above is unfortunately not available. Focusing economic diplomacy to resolve the legal problems Bangladeshi migrant workers are facing abroad so as to prevent their premature return home, helping unemployed migrant workers abroad find decent jobs, improving the skill composition of new migrants, ensuring the competitiveness of the exchange rate, and ring fencing remittance transactions from the impact of political turmoil might help stem the decline in remittances experienced in the first half of FY14.

1,727 killed in workplace accidents in 2013 (Dhaka Tribune, January 10, 2014)
At least 1,727 workers were killed, and 2,307 injured, in workplace accidents during the year 2013, said a press release issued by the Bangladesh Occupational Safety, Health and Environment Foundation (OSHE). Casualties were high in formal sectors such as the garment industry, which experienced 1,170 deaths and 1,748 injuries. The Rana Plaza collapse alone saw 1,135 deaths and 1,248 injuries. More than 26 workers were killed in accidents in the ship-breaking sector, while 40 sustained injuries.

Exports rise 17% despite political unrest (Dhaka Tribune, January 10, 2014)
The country’s export earnings rose by 16.6% to US$14.68bn in the first half of the current fiscal year, despite the growing political turmoil. The earnings were $12.6bn in the July-December period of last year. The knitwear and woven garments, the two largest export earners, posted 19.5% and 20% growth respectively, followed by frozen foods 30%, shrimps 34%, vegetables 35%, footwear 35% and leather 44% in July-December period compared to same period of the last year. Jute and jute products and home textiles fell by 17% and 6 % respectively.

China surpasses US as world's largest trading nation (The Guardian, January 10, 2014)
China became the world's largest trading nation in 2013, overtaking the US in what Beijing described as "a landmark milestone" for the country. China's annual trade in goods passed the $4tn (£2.4tn) mark for the first time last year according to official data, after exports from the world's second largest economy rose 7.9 percent to $2.21tn and imports rose 7.3 percent to $1.95tn. The US is yet to publish its 2013 trade figures, but with trade totalling $3.5tn in the first 11 months of the year, it is unlikely to beat China. The shift in the trading pecking order reflected China's rising global dominance, despite a slowdown in economic growth last year.